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To: Mike M2 who wrote (13584)	1/29/1998 9:00:00 PM
From: Simon	Respond to of 18056

what AG means by tight money.>> I thought he had the pedal to the metal at the printing press plant. Maybe my source was wrong? Struck me as kind of weird.

To: Mike M2 who wrote (13584)	1/29/1998 9:47:00 PM
From: Tommaso	Respond to of 18056

"Howard, I don't know what AG means by tight money. It does not seem to square with the growth of M3." Unless he means that world-wide productivity can increase 8-9% and that people can find ways to absorb this. How about turning 4-meg disk drives into ashtrays--no that won't do with people cutting back on smoking. Doorstops. What Greenspan says does seem a kind of hypocrisy but I think that the intention is to keep the economic machinery greased and moving. But what I could really use at this point is more services, not more goods. Like a government program to send out housemaids to mop all the kitchen floors and get the scum off all the bathtubs.

To: Mike M2 who wrote (13584)	1/29/1998 11:15:00 PM
From: paul ross	Read Replies (2) \| Respond to of 18056

William- Though M3 increased at a 8.6% rate thru 97, 4926.2 billion to 5352.1 billion (12/3/96 to 12/29/97), the more liquid or "spendable" aspects of money supply came in at lower rates. M2 at 5.5%. 3824.0 billion to 4034.9 billion, while M1, the most liquid component actually decreased from 1084.9 billion to 1078.3 billion. PR

To: Mike M2 who wrote (13584)	1/30/1998 12:31:00 AM
From: Mark Nelson	Respond to of 18056

Mike, Re: "...what AG means by tight money" It's interesting that (if I remember correctly) he couched the idea with a reference to the inflation rate relative to returns on bonds. Wasn't it just last year that the Fed jiggered the calculation method because they "believed that inflation was overstated". So, they tightened money by re-stating the inflation rate. My thought was that they wanted to squeeze social security and numerous other entitlement outflows that are indexed to inflation in the form of lower COLA's (cost of living allowances). The resultant surplus pays down the general budget and voila ...goldilocks lives. Ya just gotta wonder how this will all unravel. Mark

To: Mike M2 who wrote (13584)	1/30/1998 10:27:00 AM
From: Mike M2	Respond to of 18056

For bears only gold-eagle.com

To: Mike M2 who wrote (13584)	1/30/1998 11:26:00 AM
From: Mike M2	Respond to of 18056

I often see people comment that real interest rates are high-relative to inflation as indicated by the cpi. Few people seem to consider the supply and demand factors. A significant factor lowering interest rates has been the willingness of foreigners to purchase our debt. The bond bulls should be concerned that SEA and it's central banks have been major buyers of our debt and hold a significant amount of our debt. I don't see where they will be in a position to purchase much of our debt in the future. I am surprised that they have not sold much thus far. I do want to stress that going forward the U.S. will not have the support of SEA buying our debt this should put upward pressure on interest rates but it may take time. Another note on inflation there is price inflation and monetary inflation. Monetary inflation is the the expansion of money and credit beyond economic needs( GDP growth) and available savings. The monetary inflation is in the financial markets. mike